Though the timing is not auspicious for a major breakthrough, small agreements are possible, given the significant progress that had been made before Mumbai.

“The time is bad,” says Salman Haider, a former foreign secretary of India. “Both governments are really wobbly at the moment [and] the preoccupations of both these leaders will be elsewhere than these talks.”

Indeed, neither government is in a strong position to be making major deals.

Pakistan’s prime minister just dissolved his entire cabinet due to opposition pressure and continues to face massive challenges steering a nation around the shoals of bankruptcy and Islamic insurgency. In India, meanwhile, corruption scandals have engulfed the government for months, sapping some of the moral authority it will need to parlay effectively with Pakistan.

That said, back room negotiations in the recent past did come close – “down to the semicolons,” according to accounts – to a deal regarding the disputed territory of Kashmir. The sudden weakening of then-President Pervez Musharraf’s rule over Pakistan halted the effort, followed by the attacks on Mumbai.

Until today's announcement, New Delhi had conditioned future talks on Pakistan taking such measures as cracking down on LeT and its ties within the state intelligence apparatus. Pakistan has countered that it has put seven suspects on trial over the attacks.

The announcement to resume talks, argues Najmuddin Shaikh, a former foreign minister of Pakistan, is partly the result of a “growing realization" in India that its priority on seeing a wider Pakistani dragnet for Mumbai before all else "has proved counterproductive.”

No date has been set for resumed talks, but when they do, Mumbai will be looming over them.

“It becomes very difficult to send [any agreements] to anyone in India if the feeling is that we have not really pushed hard enough on Mumbai,” says Haider. But, since the announcement spoke of a dialogue "on all issues," Pakistan could budge some on Mumbai, while India gives on other issues, he adds.

Mr. Shaikh points out that with resumed talks, some of the standoffs that were close to being resolved in the past may now move forward. Two of these include the border disputes of Sir Creek and the Saichen Glacier.

But he’s quick to caution that talks won't be easy. Indeed, talks between both nations have always been enormously volatile. When momentum builds, diplomatic spats and terror incidents often yank the opportunity back like Lucy with Charlie Brown's football.

“If deals on Siachen and Sir Creek emerge, then the atmospherics can change and the volatility [of the peace process] can be somewhat reduced,” says Shaikh. Such measures would also help revive quiet talks over a disputed Kashmir settlement. “A lot of the things in the backchannel have a lot to do with the level of trust.”

Even with confidence-building agreements on smaller border disputes, however, the bigger questions of Kashmir are not likely to be answered by a grandiose stroke of bilateral diplomacy. Kashmiri leaders will have to be brought into the negotiation process and the public in both countries will need to be convinced of the wisdom of any deal.

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